3.Daphne just purchased a fancy new tire balancer for her automotive service business. The cost was $33,000. Daphne is trying to decide whether to use MACRS or straight line depreciation. The balancer is a 3 year asset. Daphne is in the 35% tax bracket. Compute the deprecation under both methods and compute the tax savings in year 2 if she uses MACRS.

MACRS Percentage /\ MACRS Dep Amount /\ Straight Line Dep Amount /\ Tax Effect

1. .3333 /\ ______________ /\ _______________

2. .4444 /\ ______________ /\ _______________ /\ _____________

3. .1482 /\ ______________ /\ _______________

4. .0741 /\ ______________

PLEASE SHOW HOW YOU FIND THE ANSWERS!!!!